Immigration loophole 'exploited' by companies
The Government's immigration cap has been labelled a “sham” as new figures reveal that companies will be able to bypass the restriction to bring in thousands of foreign workers.
By David Barrett, Home Affairs Correspondent
July 4, 2010
Theresa May, the Home Secretary, announced last week that the number of migrant workers coming to the UK from outside the European Union will be limited to 24,400 a year, fulfilling a Conservative manifesto pledge.
However, the Home Office has admitted that the interim cap will not apply to a system known as “intra-company transfers”, or ICTs, which allows firms to bring in non-EU nationals who are already on their payroll.
New figures reveal the extent to which companies are able to use the ICT system to import foreign staff on a massive scale.
One Indian company, Tata Consultancy Services (TCS), sponsored 4,600 of its employees to come to Britain in 2008 through ICTs, according to Home Office data.
Although there is no suggestion that TCS has broken the rules, the scale of immigration from India through the intra-company transfers is startling.
Another Indian company, Infosys Technologies Limited, sponsored 3,235 foreigners to come to the UK in the same year, while a third, Wipro Technologies, brought in 2,420.
While the Home Office has said that there were 30,000 arrivals under the ICT system last year, this was down from a total the previous year of 46,000 – suggesting that the use of ICTs could rise again when the global economy recovers.
In 1992 there were only 7,000, rising by 1997 to 15,000.
Indians make up 70 per cent of the migrants brought to Britain on ICTs, while others are from nations including the US, South Africa, Japan and China.
Although the system is intended to help companies which cannot recruit suitable candidates within the UK, critics claim that in practice much of the work could easily have been done by Britons.
The Home Office has disclosed the names of around 20,000 employers which are registered to bring skilled migrant workers into Britain on so-called “Tier 2” visas.
Names on the list, published on the UK Border Agency website last week, range from Chelsea Football Club and Conservative Campaign Headquarters to hundreds of Thai restaurants, Indian takeaways and kebab shops.
Among the companies on the list, around 4,700 are permitted to use ICTs. Yet the UK Border Agency only has 125 staff responsible for visiting sponsor companies and keeping checks on them.
Unions and professional bodies claim that ICTs are being manipulated by some companies as a source of cheap labour, undercutting British employees and forcing them out of work.
The Government is still considering the details of the permanent annual cap on non-EU migrant worker numbers, which will replace the interim cap announced last week.
It has yet to decide whether to include or exclude ICTs from the permanent cap.
One British IT worker described how his contract at Lloyds TSB was cut short after the bank hired a dozen Indian trainees through the ICT system.
“There was a team of about 20 people, most of whom were contractors like myself, but Lloyds brought in 12 to 15 Indians to be trained by us to do the work,” said the expert, who did not want to be named.
“The company said the Indian employees would only do low-level work but then the British workers' contracts were cut short, with just a couple kept on to supervise the Indian employees.
“These jobs would have been ideal for someone coming off a computing degree in the UK, but the company was shipping in people from abroad.
“People there did not like it at all they could see the writing on the wall. If you went to the offices about 80 per cent of IT workers were Indian.”
The IT specialist, who has 20 years' experience in the industry, said use of ICTs was widespread in the banking industry.
“ICTs are used to bring large numbers of people in for the purposes of cheap labour,” he said.
“I'm shocked that the Government are exempting ICTs from their cap. It makes their promise a complete sham.
“Surely they understand that it is leaving the door wide open for this type of abuse?”
A spokesman for Lloyds TSB declined to comment on the claims.
George Anastasi, policy adviser at the Professional Contractors Group which represents freelance and contract workers, said: “Some large companies are exploiting the loophole offered by ICTs and we want to see the system changed so it cannot be abused in this way.
“We believe that intra-company transfers have displaced lots of British IT workers, putting some of them out of work.
“We are hoping the Government will do the right thing and tighten the rules. Something needs to be done ICTs cannot be ignored forever.”
Peter Skyte of the trade union Unite said: “Our prediction is that the ICT will remain after the interim period because of pressure from multinationals and from embassies.
“We are very concerned about displacement of UK resident workers and its potential for undercutting pay rates. We think its use should be limited to senior management, key personnel and people coming to the UK for training programmes.
“There should also be a defined annual minimum salary of 40,000.”
Applicants for an ICT must earn above a minimum salary level, to ensure that they are skilled workers, but the level has been set at only 24,000 a year, or only 20,000 a year for those with a degree.
A previous requirement for companies to prove that staff being brought in under ICTs had specific knowledge and that jobs could not be filled by Britons was relaxed at the end of 2008.
Although the rules state that a worker brought in on an ICT must not “be directly replacing a settled worker”, many in the IT industry report that this requirement is not adhered to in practice.
Sir Andrew Green, chairman of the pressure group MigrationWatch, said: “The ICT is being abused on a very significant scale. It is very easy to 'game' the system and ensure that your applicant just fits within the requirements.
“Policing of the ICT needs to be strengthened to ensure it is not being manipulated.”
One reason for bringing applicants to Britain was to “prepare the ground” for moving operations overseas, such as moving call centres and data processing to India, he said.
A report by the Government's Migration Advisory Committee (MAC) last summer expressed concern about ICTs and recommended that the Government should “consider both the level of resource it devotes to enforcement and the transparency of these activities”.
Other countries with equivalent systems to the UK's ICT require candidates to be more senior employees, or to have been with their employer for longer.
The MAC recommended extending the required period of employment from six months to 12.
Damian Green, the immigration minister, said: “It is important that we attract the brightest and the best people who can make a real difference to our economic growth, but immigration is too high and needs to be reduced.
“The Government has announced it will introduce a limit on economic migration from outside the EU as part of work to scale back net migration to the levels of the 1990s, to the tens of thousands rather than hundreds of thousands.
“Our consultation contains proposals for restricting the ICT route by bringing long-term transfers within our annual limit.”
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